Mar 3, 2010

Hard-working pop band vs. big bad major label

Having written a 40-page capstone paper on the future of the music industry amidst all the downloading/Napster/RIAA/iTunes/major record label fiasco, I'm a little bit of a nerd for news of other ways people in the music industry are marketing their music and/or making money with it. Ok Go, a Chicago band that made it big solely because of their friend youtube, is getting a lot of music press this week.

Maybe you haven't heard of OK Go before, but do you remember that music video with the treadmills? That's right, this one:

Whether you're a grandparent in the United States or a six-year-old in Thailand, that video probably made it to your computer sometime in the last four years.

Say what you want about these guys having too much time on their hands, but they are creative. And, even more importantly, they're willing to work very, very hard to get the word out there about their happy-go-lucky pop music.

Well, OK Go is at it once again, this time with an incredibly elaborate video involving dominoes, balloons, toy cars, spray paint, marbles, umbrellas, and everything in between, is becoming a viral youtube rage. You'd think that their record label, Capitol, would be excited about all this free advertising. But they're not. The reason? They make a very small amount of money anytime anyone views a music video on youtube, but not when someone views it on a blog where it's embedded (like the video above and the one below).

Capitol only cares about the money (no pun intended). The band, however, just wants people to see their video and hear their music, so they wrote this very interesting letter on their website that I'd like to publish on here too:

To the people of the world, from OK Go:

This week we released a new album, and it’s our best yet. We also released a new video – the second for this record – for a song called This Too Shall Pass, and you can watch it here. We hope you'll like it and comment on it and pass the link along to your friends and do that wonderful thing that that you do when you’re fond of something, share it. We want you to stick it on your web page, post it on your wall, and embed it everywhere you can think of.

Unfortunately, as of now you can’t embed diddlycrap. And depending on where you are in the world, you might not even be able to watch it.

We’ve been flooded with complaints recently because our YouTube videos can't be embedded on websites, and in certain countries can't be seen at all. And we want you to know: we hear you, and we’re sorry. We wish there was something we could do. Believe us, we want you to pass our videos around more than you do, but, crazy as it may seem, it’s now far harder for bands to make videos accessible online than it was four years ago.

See, here’s the deal. The recordings and the videos we make are owned by a record label, EMI. The label fronts the money for us to make recordings – for this album they paid for us to spend a few months with one of the world’s best producers in a converted barn in Amish country wringing our souls and playing tympani and twiddling knobs – and they put up most of the cash that it takes to distribute and promote our albums, including the costs of pressing CDs, advertising, and making videos. We make our videos ourselves, and we keep them dirt cheap, but still, it all adds up, and it adds up to a great deal more than we have in our bank account, which is why we have a record label in the first place.

Fifteen years ago, when the terms of contracts like ours were dreamt up, a major label could record two cats fighting in a bag and three months later they'd have a hit. No more. People of the world, there has been a revolution. You no longer give a shit what major labels want you to listen to (good job, world!), and you no longer spend money actually buying the music you listen to (perhaps not so good job, world). So the money that used to flow through the music business has slowed to a trickle, and every label, large or small, is scrambling to catch every last drop. You can't blame them; they need new shoes, just like everybody else. And musicians need them to survive so we can use them as banks. Even bands like us who do most of our own promotion still need them to write checks every once in a while.

But where are they gonna find money if no one buys music? One target is radio stations (there's lots of articles out there. here's one: http://arstechnica.com/tech-policy/news/20...ouse-senate.ars ). And another is our friend The Internutz. As you’ve no doubt noticed, sites like YouTube, MySpace, and Blahzayblahblah.cn run ads on copyrighted content. Back when Young MC's second album (the one that didn't have Bust A Move on it) could go Gold without a second thought, labels would’ve considered these sites primarily promotional partners like they did with MTV, but times have changed. The labels are hurting and they need every penny they can find, so they’ve demanded a piece of the action. They got all huffy a couple years ago and threatened all sorts of legal terror and eventually all four majors struck deals with YouTube which pay them tiny, tiny sums of money every time one of their videos gets played. Seems like a fair enough solution, right? YouTube gets to keep the content, and the labels get some income.

The catch: the software that pays out those tiny sums doesn’t pay if a video is embedded. This means our label doesn’t get their hard-won share of the pie if our video is played on your blog, so (surprise, surprise) they won’t let us be on your blog. And, voilá: four years after we posted our first homemade videos to YouTube and they spread across the globe faster than swine flu, making our bassist’s glasses recognizable to 70-year-olds in Wichita and 5-year-olds in Seoul and eventually turning a tidy little profit for EMI, we’re – unbelievably – stuck in the position of arguing with our own label about the merits of having our videos be easily shared. It’s like the world has gone backwards.

Let’s take a wider view for a second. What we’re really talking about here is the shift in the way we think about music. We’re stuck between two worlds: the world of ten years ago, where music was privately owned in discreet little chunks (CDs), and a new one that seems to be emerging, where music is universally publicly accessible. The thing is, only one of these worlds has a (somewhat) stable system in place for funding music and all of its associated nuts-and-bolts logistics, and, even if it were possible, none of us would willingly return to that world. Aside from the smug assholes who ran labels, who’d want a system where a handful of corporate overlords shove crap down our throats? All the same, if music is going to be more than a hobby, someone, literally, has to pay the piper. So we’ve got this ridiculous situation where the machinery of the old system is frantically trying to contort and reshape and rewire itself to run without actually selling music. It’s like a car trying to figure out how to run without gas, or a fish trying to learn to breath air.

So what’s there to do? On the macro level, well, who the hell knows? There are a lot of interesting ideas out there, but this is not the place to get into them. As for our specific roadblock with the video embedding, the obvious solution is for YouTube to work out its software so it allow labels to monetize their videos, wherever on the Internet or the globe they're being accessed. That'll surely happen before too long because there's plenty of money to be made, but it’s more complicated than it looks at first glance. Advertisers aren’t too keen on paying for ads when they don’t know where the ads will appear (“Dear users of FoxxxyPregnantMILFS.com, try Gerber’s new low-lactose formula!”), so there are a lot of hurdles to get over.

In the meantime, the only thing OK Go can do is to upload our videos to sites that allow for embedding, like MySpace and Vimeo. We do that already, but it stings a little. Not only does it cannibalize our own numbers (it tends to do our business more good to get 40 million hits on one site than 1 million hits on 40 sites), but, as you can imagine, we feel a lot of allegiance to the fine people at YouTube. They’ve been good to us, and what they want is what we want: lots of people to see our videos. When push comes to shove, however, we like our fans more, which is why you can take the code at the bottom of this email and embed the "This Too Shall Pass" video all over the Internet.

With or without this embedding problem, we'll never get 50 zillion views on a YouTube video again. That moment – the dawn of internet video – is gone. The internet isn’t as anarchic as it was then. Now there are Madison Avenue firms that specialize in “viral marketing” and the success of our videos is now taught in business school. But here's a secret: zillions of hits was never the point. We're a rock band, and it’s a great gig. Not just because we get to snort drugs off the Queen of England (we do), but because the only thing we are expected to do is make cool stuff. We chase our craziest ideas for a living, and if sharing those ideas takes 40 websites instead of one, it doesn’t make too big a difference to us.

So, for now, here's the bottom line: EMI won't let us let you embed our YouTube videos. It's a decision that bums us out. We've argued with them a lot about it, but we also understand why they're doing it. They’re aware that their rules make it harder for people to watch and share our videos, but, while our duty is to our music and our fans, theirs is to their shareholders, and they believe they’re doing the right thing.

It's long, but quite interesting as for the future of music. The original copy of the letter appeared here on the band's website. Note that the link they posted in the letter turned into the video because I pasted it onto my blog. Most interesting of all, Capitol has succumbed. The official Capitol-posted youtube video is now able to be embedded too. Long live the underdog.